56% of Americans believe economy is already in recession. They might not be wrong

There’s a significant disconnect between how economists and ordinary Americans view the economy.

According to a Harris poll conducted for The Guardian, 56% of Americans think the U.S. is experiencing a recession, which is usually defined as back-to-back quarters of negative growth.

More than half of respondents (58%) also blame the Biden administration for mismanaging the economy.

Of course, many economists would be quick to point out that the economy isn’t experiencing a recession at all since GDP growth remains positive.

Although economic growth slowed to a trickle in the first quarter, the drop wasn't big and long enough to be considered a recession.

But the fact that the economy is growing—albeit slowly—doesn't negate the strain caused by inflation, which remains uncomfortably high for the majority of Americans.

That could explain why Americans are so pessimistic about the economy. It could also be that they don’t entirely trust what the government tells them.

They wouldn’t be wrong to question where the data was coming from or how government economists defined recession.

The irony of calling a recession

The U.S. economy actually met the conditions of a technical definition of a recession in 2022 when its output contracted for two consecutive quarters.

At the time, the Biden administration tried to spin the narrative by—you guessed it—redefining what it means to be in a recession.

President Biden cited positive job growth and foreign business investment as a sign that the economy was humming along. “That doesn’t like a recession to me,” he said.

But not everyone bought the argument.

Rep. Jason Smith, a Republican from Missouri who chairs the House Ways and Means Committee, accused the government of essentially gaslighting Americans.

“In its latest attempt to deny the cruel economy they’ve created, the Biden administration is now redefining recession and downplaying the red flags in the economy,” Smith said.

Political bickering aside, acknowledging that a recession is underway has always been a contentious subject.

Even during the 2008 financial crisis, which resulted in the worst recession of a generation, it wasn’t entirely clear when the economy actually entered a recession.

As economist Peter Schiff noted, the Great Recession actually began in late 2007, but “we only found that out a year in” after government economists revised previous data. (FYI: They’ve done the same thing with jobs data.)

“We were almost out of the recession by the time the government told us we were in it,” he said.

In Schiff’s view, the economy has the same red flags it had back then.

The government was “using the same Goldilocks analogy back then as they’re using now,” referring to the ideal state for an economy that doesn’t grow or shrink too much.

“And all through the first half of 2008, it was the same old nonsense about how we had this great economy.”

Perhaps the biggest problem facing the U.S. economy right now is that growth is decelerating while inflation remains high—putting the economy at risk of stagflation.